Monsanto Outline
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Table of Contents
o Overview
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Company Mission & Objectives
 Monsanto wants to deliver high quality products that are not only
helpful to their customers, but for the environment as well.
Monsanto has three commitments, sustainable agriculture,
human rights, and corporate giving. They are dedicated to giving
farmers the largest choice of products and services that will help
them produce and conserve more, and lead better lives. They
have the highest yielding conventional and bio tech seeds.
Monsanto has advanced traits and technologies that enable
farmers to have better crops, and they have the safest most
effective crop protection solutions.
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Main 2 areas of business:
 Seeds and Genomics
o Germplasms
 Corn
 Cotton
 Wheat
 Agricultural Productivity
o Main products by revenue
 Roundup ($1.5 Billion)
Distribution methods
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General Facts
 Market cap: $31.87B
 2009 Net Sales: $11.7 Billion
 Average volume: 8.12M
 Employees: 22,900 regular + 4,000 seasonal
 Headquarters: St. Louis , Missouri
History
 Monsanto has been around since 1901, and started with making
artificial sweetener. The first entry into agriculture happened
around the mid-1940s. Monsanto’s first product was Santobane,
an insecticide. This was the start of the company trying to make
products that met farmers’ needs; such as herbicides, fertilizers,
biotech, seeds, and even a protein supplement for animals.
Monsanto plans to find as many solutions to the new and
upcoming problems the world faces, one that is an aid to the
world.
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Graphs
o Financial Statements & Ratios
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Numbers to Know
 P/E Ratio
 Earnings per Share
 Dividend Yield
 Cash Flow/Expenditures
2007- 2009 Operating Results & Performance
 Charts
Competitors/Industry standards
 Comparison Chart of top 5
Ratios
 Liquidity
Current Assets
o Current
Current liabilitie s
Current assets - inventory - prepaids
o Quick
Current liabilitie s
Cash and marketable securities
o Cash Ratio
Current liabilitie s
 Activity Ratios
o Accounts Receivable Turnover
Credit sales
Average Accounts receivable
o
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Net sales
Average Fixed assets
Leverage
o Debt to equity
Total liabilitie s
Owner' s equity
o Asset to equity
Total Assets
Total Equity
o Debt to total asset
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Profitability
Total liabilitie s
Total assets
Gross profit
Net sales
Net profit
o Net Profit Margin
Net sales
Net profit
o Return on Equity Ratio
Average Owner' s equity
o Gross Profit Margin
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Market
Net income - Preferred dividends
Number of common shares
o Price Earnings to Growth
Price earnings ratio
Annual expected growth rate in %
o Earnings per share
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o
Taxes and Accounting Issues – we will discuss any unique tax or
accounting procedures that Monsanto has implemented that could
change their books
Growth Strategy
 Acquisitions
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2010
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2009
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WestBred LLC, a Butte-based producer and wholesaler of
cereal grain seed, from Barkley Seed Inc, (July 2009)
Stakes
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Chesterfield Village Research Center, from Pfizer Inc. The
acquisition will enable Monsanto to perform bio
therapeutic pharmaceutical research. (Jun 2010)
InterGrain Pty Ltd, a Perth-based provider of crop breeding
services. (Aug. 2010, an Australian based Co.)
 MDM Sementes de Algodao Ltda, a manufacturer and wholesaler
of cotton (mar 2009)
Divestitures
 Syngenta AG of Switzerland acquired the global sunflower assets
of Monsanto Co (Aug 2009)
Company Goals
 Monsanto develops technologies that allow farmers to produce
more crops while conserving more of the natural resources that
are necessary for their success. By 2030, Monsanto has
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committed to Produce more, conserve more and improve lives all
over the world.
Double 2007 gross profit by 2012
Research & Development
 Monsanto spends about $2.6 million a day on research and
development. By doing so this enables them to develop a very
robust pipeline of products in the industry.. Monsanto aims at
advancing agriculture in order to make it more productive and
profitable for farmers as well as more sustainable for the
environment. Monsanto developed a pipeline project system
consisting of the following: corn, cotton, soybeans, specialty corps
(canola, sugarcane, wheat) and vegetables.
Restructuring sales force
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o Growth Prospects
 New Technology
 7 high impact technologies
o Monsanto has plans to invest heavily in 7 crop enhancing
technologies over the next 7 years.
 Soybeans
 Cotton
 New Markets
 Monsanto is aggressively expanding into new crops
o Cotton
o Wheat
o Sugarcane
 International
o Latin America
 Brazil
 Argentina
o India
o Australia
 Intellectual Property
 Problems in Holland and Argentina
 Legal Action against Pioneer
 Risks/ Problems
 Lawsuits
o Price Fixing allegations
o Clean Water Act
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Regulations – Monsanto faces tight government regulations in
many places
o Germany – ban on planting of certain corn products
o India – threatened by state run pricing directives
o France – suspension of planting certain corn products
o Brazil - tax assessments
o United States - EPA claims
 Environmental Risks
o Drought
o Natural Disasters
 Economic Climate
o Commodity supply problems
 Oversupply of glyphosate which is a Roundup input
o Emerging market and foreign currency exchange rate
volatility
o Strained availability of credit due to recent global
economic recession
o Investor Recommendation
 Analyst Recommendations
 Daily Finance
 MarketWatch
 Seeking_Alpha
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Our Recommendations